Okay folks, I am going to tell it how it is. Business confidence is down, consumer confidence is down, the share market closed today at a four year low, things are starting to look a little hairy. Without being overly dramatic the business landscape, for the time being, has changed considerably, consumers are tightening the purse strings and are more picky than ever with where they spend their money. And as consumer spending habits start to change businesses invariably start realising just how important consumer loyalty is to their survival.
I am here to say loyalty is dead. A bold claim, I know, but it is ultimately the truth in economic conditions like these. If someone can get a better deal down the road, even though they have been spending with you for years, you can bet they are going to cheat on you. It’s harsh, but it’s true.
So if consumers are by their very nature fickle creatures, how can we build and ensure continued loyalty? First things first. Get rid of the damn ‘Loyalty Cards’! Consumer loyalty to your business or brand is not built on whatever (almost always insignificant) incentive offered by programmes such as these. Bordering on bribes (if you buy x amount of this, we will give you x amount of that) loyalty schemes expend so much energy focussing on how to keep the consumer buying from them , they have no time left over to devote to the real source of consumer loyalty – providing a product or service the consumer finds irresistible.
Consumer loyalty is built upon a foundation more abstruse than most businesses realise. The true nature of consumer loyalty is bipartite; it operates on both a tangible and intangible level. Great products, service and attention to detail are the tangible aspects of a business providing the consumer with an experience they will want to relive. The intangible aspects are what develops from the tangible – the value a consumer places upon your product or service offering.
Value is key. It does not refer to dollar value, but the worth a consumer derives from purchasing a product or using a service. If the consumer feels, that due to attention and care paid to the tangible aspects of the offering, the purchase experience outweighs the monetary cost ascribed to that experience, your business will ride out the economic downturn.
In effect businesses must stop demanding loyalty of their customers, and instead pledge their loyalty to them. It’s a novel idea, but one that is working for thousands of switched on businesses all over Australia. And the best thing of all? There’s not a ‘Loyalty Card‘ in sight!